Australia’s speculator frenzy has gotten a second wind, according to today’s Lending Finance data for August, released by the ABS.
As shown below, the annual value of investor loans in New South Wales (read Sydney) rose for the first time in a year, with Victoria (read Melbourne) – the second hottest market – also registering an increase. By contrast, investor loans in Western Australia and Queensland continued to retreat:
However, despite the latest increase, rolling annual growth in investor loans has fallen sharply across the board, with Western Australia most deeply in the red:
As at August 2016, investors accounted for a still-staggering 52.5% of total housing finance commitments (excluding refinancings) in New South Wales (Sydney), up marginally from July but still down sharply from the record 61.7% share posted in June 2015. Victoria’s (read Melbourne’s) share of investor mortgages also rebounded slightly to 43.9% in August, although it was still down from June 2015’s 52.3% peak. The share of investor lending was never as dominant in the other major jurisdictions, nevertheless they are are in retreat in Queensland and Western Australia, but firmed slightly in South Australia:
Putting the two charts together for New South Wales (Sydney) produces the following:
The rebound in New South Wales’ (Sydney’s) investor demand is shown more closely in the below charts:
By comparison, the rebound in Victoria (Melbourne) is a bit less pronounced:
Regardless, specufestor spirits are starting to reignite in the key bubble markets of Sydney and Melbourne. APRA should get ahead of it and tighten its investor speed limits pronto.
